The Canadian dollar strengthened against its U.S. counterpart on Tuesday, rebounding from a one-week low the day before, as the prospect of U.S. stimulus bolstered investor sentiment, while domestic data showed factory sales pulling back in November. Global market indexes climbed and the U.S. dollar eased before Janet Yellen's Treasury Secretary confirmation speech, in which she is expected to bolster the case for heavy fiscal stimulus in the world's largest economy. Canada sends about 75% of its exports to the United States, including oil.
Economic data from the Eurozone and Canada are due out on a relatively quiet day on the economic data front. Expect COVID-19 to remain a key driver alongside geopolitics.
USD/CAD tried to settle above the resistance at 1.2800 but failed to develop sufficient upside momentum.